Bachelor of International Marketing - COnnecting · PDF fileBachelor of International...

Bachelor of International MarketingHow Sapa can gain a leading position in the

Spanish aluminum extruder industryGene Steffan Chalan Castro

Ricardo GallegosMagnus Skedsmo Nordbrenden

June 9th 2016

This paper is done as a part of the undergraduate program at BI Norwegian Business School. This does not entail that BI Norwegian Business School has cleared the methods applied, the results presented, or the conclusions drawn

Table of contents

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1. Summary 72. Introduction 8

2.1. Company presentation 82.2. Sapa’s 3 core areas 92.3. The history of Sapa 102.4. Sapa’s mission, vision & values 122.5. Sapa Group value chain 132.6. Introduction to Sapa Extrusion Iberia 142.7. Main markets 15

3. Introduction to the aluminum industry - main figures 163.1. Revenues share per plant 183.2. Employees per plant 193.3. Employee & revenue trend 20

4. Competitor overview 214.1. Main competitors 214.2. Strategic groups 22

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5. Problem definition 235.1. Focus areas 245.2. Limitations 25

6. Analysis 266.1. PESTEL Analysis 266.2. Porters 5 forces 27

7. Kotlers buying process 297.1. Kotlers buying process for Sapa 307.2. Kotlers buying process stages 31

8. List of information needed 349. Primary research design and method 3510. Summary of the interviews conducted 37

10.1. Experts 3710.2. Competitors 4010.3. Customers 42

11. Global conclusion 4511.1. Problem definition 4511.2. Problem definition context 4611.3. Answer to problem definition 47

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12. Strategy 4812.1. Frame of reference 4812.2. Identify potential substitute products and other competitive threats 4912.3. Mission statement 5012.4. Risk-profitability binomial 5112.5. Corporate objectives 52

13. Target market 5313.1. Frame of reference 5313.2. WHO 5413.3. WHAT 5413.4. HOW 55

14. Macro segmentation 5614.1. Summary of who, what and how 5614.2. Macro and industry segments 5714.3. Solution life cycle 5814.4. Macro segment 1 – Building systems 5914.5. Macro segment 2 – Transport 6014.6. Macro segment 3 – Building and construction 6114.7. Shake-out phase 6214.8. Macro segment 1 - KSF and distinctive competences 6314.9. Macro segment 2 - KSF and distinctive competences 6414.10. Macro segment 3 - KSF and distinctive competences 65

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15. Strategic SWOT 6616. Conclusion Porters 5 forces 7617. Choice of competitive strategy 7718. Choice of growth strategy 7919. Competitive attitude 8120 . Segmentation strategy 83

20.1. Criteria for efficient segmentation 8320.2. Choice of segmentation criteria 86

21. Segmentation – Macro and micro 8721.1. Factors to decide micro segments 8921.2. Factors to decide main benefit sought 90

22. Choice of segmentation strategy 9222.1. Microsegments in Building systems 9322.2. Microsegments in Transport 9422.3. Microsegments in Building and construction 95

23. Positioning strategy 9623.1. Positioning map 9623.2. Positioning strategy for Sapa 97

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24. Marketing mix 9824.1. People: Common for the three micro segments 10124.2. Place: Common for the three micro segments 10224.3. Marketing mix: Breezes 10324.4. Marketing mix: Automobiles 10524.5. Marketing mix: Houses 107

25. Budget 10926. Evaluation 110

26.1. Do’s 11026.2. Don'ts 111

27. Reference list 11228. Annex 114

• In our study we have researched the possibilities for the aluminum extrusion company, Sapa, to attain a leading position. The background for this choice is that Sapa is a relatively new company which entered the Spanish market in 2013 through an acquisition by Hydro and Orkla in a 50/50 joint-venture, this meant an entire restructuring of the plants in Spain and a new brand name in the business. During the last two years they've had a significant downfall in revenues compared to before the joint-venture, now that the restructuring phase is over they want to focus their resources on raising profit margins, achieving a larger share of the market and gaining a vital position in the industry. There were several criteria to take into account before starting; price sensitivity due to high competitiveness in the industry, a strong ongoing price war between the extruders and one that made our task very interesting and complex was that there is no transparency in the Spanish market.

• To achieve our task we started researching secondary sources, but came to the conclusion that there was a significant lack of available information about competitors, key figures and customers. Therefore we had to perform a series of qualitative interviews with industry experts, competitors and consumers within the relevant segments.

• Based on our research and qualititative interview, we propose a focused differentiation strategy for three identified micro segments based on a benefits sought segmentation approach. A focused differentiation strategy implies a three-pronged marketing mix, one for each micro segment, to educate our customers (who are in the B2B market), increase awareness toexisting and future clients while enhance the firms image to increase brand loyalty .

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1. Summary

2. Introduction2.1. Company presentation

• Sapa is a 50/50 joint venture owned by Orkla ASA and Hydro ASA, it’s HQ is based in Oslo, Norway . The joint-venture was created in 2013.

• Sapa develops, manufactures, and markets value-added profiles, profile-based building systems, and tubing solutions for automotive and heating, ventilation, air conditioning & refrigeration (HVAC&R) applications in lightweight aluminum.

• Sapa has a presence in more than 40 countries around the world, primarily located in Europe, North America, South America, and Asia.

• Sapa’s largest customers are within the automotive, building, engineering, and transport industries.

• Their business concept is based on a close co-operation with their customers, while providing extruded aluminum solutions for practically any application.

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2.2. Sapa’s 3 core areas

EXTRUSION | 24 percent market share in Europe

BUILDING SYSTEMS | 18 percent market share in Europe

PRECISION TUBING | 64 percent automotive market share

Sapa is the world’s leading producer of extruded aluminum profiles, with solutions virtually in all industries. Sapa’s profiles replace other materials and design methods. Aluminum can be a substitute for steel, copper, plastic, or wood.

Sapa’s building systems facilitate efficient and high-quality construction work. This lowers building and operating costs. Energy efficient solutions that often lead to an environmentallyfavorable solution. The solutions are provided for homes, offices, and industrial buildings, as well as systems for windows, doors, facades, and glass roofs, ventilation, heating .

Sapa’s aluminum tubing solutions are used in heat transfer applications for the automotive, HVAC&R (heating, ventilation, air-condition & refrigeration), and solar market segments. By substituting traditional materials with aluminum, customers can improve the performance of their products.

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2.3. The history of Sapa: Part oneA 100 years of common knowledge …

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2.3. The history of Sapa: Part two… merged into a new company called SAPA

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2.4. Sapa’s mission, vision and values

Customer first

Values

We are aluminium.Excelling in technology and innovation.

Today and tomorrow.Sapa – Innovative aluminium solutions.

Mission Vision

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Deliver profitable growth through good organic development complemented by strategic

acquisitions of companies and alliances that further strengthen our market positions.

Trustworthy One company Entrepreneurship Accountability

2.5. Sapa Group value chain

EXTRUSION

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2.6. Introduction to Sapa extrusion Iberia

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• The worldwide Sapa Group is represented in Iberia as SapaExtrusion Iberia with 7 plants, where the Avintes plant is located in Portugal and the St. Oliva plant is only dedicated to anodizing and powder coating.

• There are a total of 524employees and together they produces around 55 000 tons of aluminium each year.They consist in 24% of the market volume.Sapa Spain is all plants located in Spain, that means all of them excluding the Avintes plant.

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2.7. Main Markets - Sapa Extrusion Spain

SAPA Extrusion - Spain

Building systems Transport Building and construction

• Lighting• Heating• Cooling• Ventilation• Solar equipment• Electrical equipment

• Automotive• Commercial transport

• Truck, trailer, bus, marine

• Public transportation• Train, subway

• Building and construction• Residential• Offices• Industrial buildings

Customer example: LecitrailerCustomer example: Bosch Siemens, Phillips and Socelec

Customer example: Red Electrica

1400 customers ⊚ Engineers & non-engineers ⊚> €20 mill. invoices ⊚ 20-100T purchase volume

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2.7. Main marketsAccording to The B2B customer supplier-relationship, there are three types of customers; Collaborative customers, activist customers and passive customers. Our customer profile is located in between the collaborative and activist category.

Collaborative customer (engineer)• These are able and willing to share the control of the relationship with their suppliers. • Shared control involves exchange of information on the wants and desires of the customer along with the basic offerings

by the supplier. • Ideal type for 1-1 marketing.• Provide expertise in the development and engineering of products.

Activist (non-engineer)• Customer seeks a high level of control of the business customer experience. • In many industrial markets, this is the most common relationship. Manufacturers act as customers set the specifications,

delivery requirements and cost parameters, and their supplier meet these terms.

Spain

Market volumeforecast (2018)240 000 tons

3,4% increasefrom 2013

Market valueforecast (2018)

€359.8m 11,3% increase

from 2013

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3. Introduction to the aluminumindustry - main figures

France

Germany

3.1. Revenues share per plant 2013

17 %

9 %

26 %

38 %

10 %

Avintes Miranda Navarra La Roca + Pinto + St. Oliva La Selva

• Most recent figures per plant are from 2013 due to limited information available to us from the company.

• La Roca, Pinto and St. Oliva report numbers as one plant because they have a gathered financial statement. They are the plants with the highest share of revenues that year :€54M – this correlates with them having the strongest production capacity.

• Lowest share in revenues is the Miranda plant with:€13M

• Total of 2013, all plants :€146.6M

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3.2. Employees per plant 2013

21 %

12 %

19 %

39 %

9 %

Avintes Miranda Navarra La Roca + Pinto + St. Oliva La Selva

• The plants with the highest share of employees are La Roca, Pinto and St. Oliva with 232 people.

• The plant with the lowest share of employees is La Selva with 57 people due to them being the smallest in production capacity , although they were more efficient than Miranda that year .

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3.3. Employee & revenue trend - Sapa Spain

Key takeaways:

• Largest change in employees was between 2014 and 2015: 612 to 524

• Largest change in revenues was between 2011 and 2015: €219M to €159M

• Worst revenue year was 2014 with €126M• The figures in red show revenue per

employee, which is a ratio that looks at a company's sales in relation to the number of employees they have. It is calculated as: revenue divided by the number of employees.

• All key figures correlate with restructuring related to joint venture and brand modification.

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414 950

372 245385 110 377 470

329 092

206 993

305 297

Num

ber o

f em

ploy

ees Num

bers in million €

EXTOL

Revenues€42.795M

(2012)Employees

173(2014)

EXTRUGASA

Revenues€46.086M

(2012)Employees

199(2012)

EXLABESA

Revenues€48.595M

(2012)Employees

90(2012)

SAPA EXTRUSION

SPAIN

Revenues€159.976M

(2015)Employees

524(2014)

ALUMINIOS CORTIZO SA

Revenues€175.667M

(2014)Employees

327(2014)

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4. Competitor overview4.1. Main competitors

ALUMITRANRevenues€55.687M

(2014)Employees

250(2012)

• Presented above is Sapa’s direct competitors, based on revenues, production capacity and marketing. Here they are topped only by Cortizo which has almost double the yearly production capacity (55000T vs 80000T).

4.2. Strategic groups

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From the analysis of the 15 closest competitors regarding revenue over 50 Mill EUR, we have detected 3 groups:

Figure 1 – Numbers from SABI - Financial Data 2013, Annex 1

Group: “Small” “Medium” “Large”FactorsNumbers of companies 8 4 Medium Sized 3 Large companiesSize (Revenue EUR) 50 - 82 Mill 171 - 252 Mill 394 - 2267 MillPurchases Most Medium LeastReturn on Shareholders fund (Average)

Average are 8%Except Compañia Valenciana (-12%) and EXL Quintaglass (-26%)

Average 15%

Except SAPA (-17%)

Average 17%Except Aluminum (36%)

Cost pr. Employee (EUR) 37 000 42 000 53 000

Debt (EUR) 10 Mill 23 Mill 1,5 MillAverage Total Assets (Tangible and intangible)

43 mill 467 Mill 769 Mill

Average number of employee

154 393 668

Conclusion Small low-cost profile companies, which target MSF

Specialized Premium Producers that focus on R&D and added value

Mass producers who benefit from Economies of scale

How can SAPA gain a leading aluminum extruder position in the Spanish market?

Our problem definition is created to further understand how SAPA effectively can gain a leading position in a highly competitive market situation

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5. Problem definition

Area Business Consumer BehaviourModel Kotler's Buying Process

- B2B focused company- Understand of the purchase behaviour and reveal key factors- Map the customers needs, in order to deliver a better core and external product- Reveal weaknesses related to SAPA in the selling process

Area Competitive analysis Model Porter's Five Forces model for competitive analysis

- Understand the environment in which Sapa competes

- Uncover tactical and strategic opportunities in the market

- Analyse market competitiveness to be able to recommend the best possible strategy

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5.1. Focus areas

During this project we have faced predicted and unpredicted limitations, which may have influenced the results in our research. The predicted limitations have been generalized, and our practice and method have affected our goal to achieve as high validity as possible.

UnpredictedLow transparency has resulted in a small sample size with slow and low response during our research. After sending e-mails to over 150 aluminum related firms and persons, we got convenient results and samples from eight objects who responded. The objects are from different parts of Spain and are not representable for the whole aluminum industry in Spain. Our quantitative research may have contained errors in some levels. We recommend further investigations with quantitative method, to achieve a representable number of objects. We could not achieve this due to lack of available and reliable data during our secondary research data collection. We have also assumed that the answers from the interview objects have been true, and our analysis is based on this primary data. Since the response was so low we got limited time for the interviews, so it was necessary to do them by Skype. The interviews became less personal and there is a risk for the answers to be less informative, than by personal meetings. The dedication of time and confidential information from SAPA has been strongly restraining.

PredictedMany companies do not speak good English, or at all, so the availability to communicate with them has been a strong limitation. The Spanish industry language has been as complicated as expected, due to the advanced and high level of vocabulary. Due to limited time and resources we have not been able to visit as many companies as we wanted, due to the geographical distances and cost related to this .

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5.2. Limitations

Technology• Aluminium is the metal experiencing the strongest

demand increases • Globally - Good transference of heat (conductivity

rate, cost saving compared to copper)• Growing market segment - LED lighting segment

Environmental• Depletion of raw materials is increasing demand for

materials with high recyclability• The European aluminium industry is striving to reduce

the environmental footprints• The importance of weight reduction is increasing

Legal• ISO Certifications• Patents: Sistema R + Alfil + Expral

Political• EU Regulations per 2015: Increased electricity price• The European Union imposed temporary duties of up

to 35.9% on foreign Steel producers in May 2015Economical

• EU Crisis leads focus on economic constrictions rather than innovation and technology.

• Low GDP growth rate (0,4%)• Aluminium market remains highly competitive, led by

international companies, while local companies make surprising inroads.

• 80 % of the Alumina producers are SMB companies, and represent 40-50 % of the market

Social• Changes on the environment becomes more visible,

people are becoming more environmentally conscious.

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6. Analysis6.1. PESTEL Analysis

● Low aluminium price = L● Generic product = L● Switching costs = L● 3-4 Suppliers = H

Rivalry- 45 competitors = H- Low growth = H- High exit costs = H- Very low transparency = H- Lack of govnmt. control = H- Price war = H

High!

● 45 Provider's = H● Loyal customers = L● Switching cost:

(Cost of a die) = L

● No new entrants = L● Reputation = L● Authorization/Patent= L

● Aluminium takes steel-market = L

● Switching cost = L

Supplier Power Buyer Power

Threats of New Entry

Threats of Substitution

Medium

Low

Low

High

6.2. Porters 5 forces

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0

0,5

1

1,5

2

2,5

3Competitive Rivalry

Threat of new entrants

Supplier powerBuyer power

Substitute

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6.2. Porters 5 forces

• Stated by Lambin (Market-driven management, 2000), the industrial buying process can be divided into several stages:

ProblemRecognition

InformationSearch

Evaluation of Alternatives

Purchase Decision

Post-Purchase Behaviour

• A buying decision process is the process a customer goes through when buying a product. It can be seen as a particular form of a cost–benefit analysis. This model is typically used to epitomize when consumers face more convoluted purchasing decisions. If it is a periodic purchase the consumers would most likely skip one or more of the steps in The Five-Stage Model. These are the stages;

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7. Kotlers buying process

Anticipation & identification of

need

Determination of specifications and

scheduling the purchase

Search for buying alternatives

Evaluation of alternative buying

options

Selection of suppliers

Performance control & appraisal

• Both buying processes are very similar, the biggest difference is that the industrial process is much more formal and they usually buy in greater quanta and higher value. Kotlers process is easier to understand and equally implementable to Sapa.

- On-time delivery- After-sales service- Switching cost

- Customization- Know-how- Design suggestions

- Continuous dialogue with the customer

- Delivering solutions

- Customization needs

- Flexibility with profile range

- Key account managers

- Continuous dialogue with the customer

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7.1. Kotlers buying process for Sapa

ProblemRecognition

InformationSearch

Evaluation of Alternatives

Purchase Decision

Post-Purchase Behaviour

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• Upon first time purchase, the customer does not “know” the product, and a thorough gathering of information is important. Routine purchases are often production components that are purchased frequently and are periodic. The entire purchase process, from assessment of needs through product specification for evaluation of solution, is in use, and more suppliers andnew solutions are being considered.

The buying processes is greatly affected by external factors, which the company can do little to influence. External factors may be the industry, the size of competitors in this industry, degree of organization and people in the variousbusinesses. How we deal with the different stages in the customer buying process is assumed to be important for customer satisfaction and loyalty, and this can be affected by Sapa. How well they handle the buying process is related to building relationships between supplier and customer, which is believed to affect customer satisfaction and loyalty (Biong & Nes, 2009).

7.2. Kotlers buying process - stages

• The first stage– problem recognition, is when the consumer discovers a need or a problem. Sapa’s clients need a specific profile solution, sometimes in a specific colour, delivered in a specific amount within a specific timeframe.

• The second stage– information search, where the consumer searches for more info based on need and if it is a first time purchase, most segments will choose provider based on reputation and word of mouth, many suppliers in the building & construction industry talk to each other and recommend the firms they’ve had the best experience with.

• The third stage– evaluation of alternative, there are several ways for the client to evaluate the alternatives, but the most common is to assess the alternatives based on some predetermined criteria. In this step, it is wise for Sapa to keep a continuous dialogue with the customer and convince they that your company is the best alternative for their needs.

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• The fourth stage– purchase decision, this is when the sale actually takes place. Sapa offers their know-how and close keeps a close co-operation with the customer to make sure the customers needs are met.

• The fifth and last stage is post-purchase behaviour. This takes place after the product/service is purchased and is based on the consumer's’ own satisfaction. If the consumer is satisfied this increases customer loyalty and the probability of repurchase.A profile die costs between €1500-6700, so most customers are very loyal and once purchased is made once, they tend stay with Sapa for a long time. Some bigger companies that are buying in large bulks get the die profile for free, Sapa strives to provide great service, high quality and on-time delivery to keep the customer coming back.

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Kotlers buying process

• Do consumers buy our brand?• How does the customers relate to price, quality, etc.• Does the customers evaluate their suppliers?• How is our product perceived by consumers?• How is our brand perceived by consumers?

• Do consumers gather information about the product?

• Needs must be satisfied before purchasing?• Kind of access does the consumer have to extrusion

companies?• Kind of follow-up does the consumer want post-

purchase?

Five Forces

• How does companies differentiate?• How are competitors challenging each others?• How do they share information? • Competitive advantage in a Black market?• How can the competition exploit their product

advantage?• How to increase market growth?• Possibilities for governmental control?• How to avoid price war?

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8. List of information needed

• Based on the information needed, found from the secondary research, we have chosen to use a qualitative research method. This is because the information we need is extensive, the industry we’re in is only B2B and a quantitative research method would not have worked. We were reliant on getting comprehensive information on the different subjects and we discovered that the qualitative method would be more useful for our research. On top of that, we believed that we didn't have an ample overview of the industry to overlook on the potentiality of acquiring unforeseen information, which qualitative methods can provide.

• We chose to conduct in-depth interviews due to the fact that we needed to talk to experts and people in the industry, these types of individuals often have a very tight schedule, and they would have no time to attend a focus group, this was thereforthe best method.

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9. Primary research design and method

• We chose experts in the aluminum industry, competitors and customers of Sapa as our interview objects.

• Experts, because they have an insight in the industry as a whole and they are neutral in regards of the competition, they know every aspect of the industry and have a lot of knowledge. They are in contact with Sapa’s competition and Sapa’s clients. Through the experts we hoped that we would get a better overview of the industry.

• Competitors, since there is almost no transparency in the industry, which makes it difficult for Sapa to position themselves to market intelligence. They have competitive information that would be useful for our list of information needed.

• Customers because they are the ones Sapa lives to serve. We needed to know what they appreciate, why they prefer one provider over the other and what could Sapa do to differentiate themselves.

• The primary method of approach with our interview objects was through e-mail and phone. We sent out over 200 e-mails, called them a day after sending out the e-mail and chose the ones that took the time to talk to use. All the interviews were conducted over Skype due to time and geographical limitations.

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9. Primary research design and method

Object industry: Spanish Aluminium Association (non-profit)Object position: General secretary

Key takeaways

● Highly competitive market, what differentiates the companies is the specialization and the sophisticated technology○ Service and quality is key

● Distribution channels are divided by products: Industrial and building and construction● Lack of trust in new technology: Old communication systems: Normal to still use fax (slow)● Reputation is important to build and maintain relationships● The crisis destroyed the industry because of the fall in demand● Price and delivery time is a MSF● Exit barriers are high – Hard to sell – need to sell to other countries● Plastic advertises aggressively and sells itself as a substitute to aluminum

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10. Summary of the interviews conducted10.1. Expert interview 1

“There is a permanent presence of the key competing product, which is plastic (PVC), they continuously try to convince the clients that their product is better and they advertise profoundly”.

Object industry: Aluminum extrusionObject position: Jr. Key account manager at SAPA

Key takeaways

● SAPA’s customers have cyclical demand● The SAPA brand name is important to the larger customers, smaller ones look for the cheapest price.● SAPA’s clients are not willing to invest on market forecasts.● Doing market forecasts could raise SAPA’s efficiency.● Competitors are very price aggressive and have shorter response time than SAPA.● Differentiation happens through added value, although not all customers appreciate this.● SAPA has no R&D dep. and not as strong technical dep. as their competitors.● SAPA has to improve on response time, although it could downgrade the level of quality and design.● Potential small/medium business clients are afraid to approach them in fear of not being taken as seriously as larger

ones or given the attention they deserve.

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10.1. Expert interview 2

Object industry: ConsultingObject position: Process consultant

Key takeaways

● Extruders can differentiate themselves by delivering a higher added value to their customers, such as advising their clients throughout the process.

● There is an intense competitive environment, especially within the EU.● Aluminium have a potential to take significant market shares from steel in the automobile industry. However, it is a

commodity and will not be able to separate a supplier from each other.● There is a problem with the transparency of information in the aluminium extrusion industry in Spain, due to a lack of

governmental regulation.● The GHG emission regulation in the US could be implemented in the EU region, effectively increasing the requirements

for the aluminium supply chain.

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10.1. Expert interview 3

Object industry: Aluminium extrusionObject position: Head of sales, Extrusiones de Toledo (EXTOL)

Key takeaways

● Longest contracts with clients are 6 months, and this is only 5% of their customer base.

● Extruders with higher production capacity, wider portfolio of products and faster delivery speed compete better.

● Prices: quoted by last month's average through the London Metal Exchange.

● Profitability in the market is very low due to a tight price for raw material.

● Reputation is important for EXTOL to uphold.● Efficiency and cost-cuts are done by new

technology related to automation of processes in the plant.

● EXTOL admits to position themselves to competitors by asking their clients about information

● EXTOL has 3500 captive clients and their own distribution channel on a national basis, but outsources it when exporting.

● Customers value; product quality, reputation of final product, the service pre, during and post-purchase and the price.

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10.2. Competitor interview 1

“Customers value the specialization bit, a wide portfolio of added value and high quality products,

as well as a fast delivery process”.

Object industry: Aluminum extrusionObject position: Key account manager

Key takeaways

● This company has a Technical-Industrial Cabinet, a Department of R+D+I, as well as an Analysis Laboratory and Quality Control.

● It’s easy to switch between suppliers for clients due to high competitiveness in the market.● Most of their clients don’t have long-term contracts.● Competitors are very price aggressive.● Distribution channel based on warehouses.● Low profitability in the market, but added value services heightens their margins.● No advertisement, they focus on CRM.● High exit barriers in the industry due to difficulty of selling presses and plants.● Differentiation happens through: special attention service to the client, quality, response time and a competitive price.

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10.2. Competitor interview 2

Object industry: LightingObject position: Purchasing manager (LAMP)

Key takeaways

● Most important for them: technical Support and Price● Other aluminium producers periodically call to sell and

offer matrixes if they choose them as provider● Demand depend on their sales; they do not buy if they

don’t need● Brand name is not important

● It is important that an extruder provides/offers: technical support and take part in the new experience and learn during the process. Meetings during the design phase so if changes are needed there will be no unexpected costs.

● What they think could be improved are: more information, know-how, availability, response time and service

● Aluminium market after the crisis in Spain as a fairly spread market

● It is important for them to get to know each other’s and present themselves in the sales process, so they can trust them

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10.3. Customer interview 1

Object industry: Aluminium industryObject position: International purchaser (Alstom)

Key takeaways

● Long-term relationships with a pool of suppliers reduces dependency and allows flexibility to create win-win situations.

● Switching fluidity in this industry is linked to technology, primarily specific tools needed to create aluminium profiles, which can be costly.

● It’s essential for suppliers to integrate more parts throughout the value chain, in order to save time, reduce costs and receive the added value of their expertise and know-how.

● The consultative role of the supplier is relatively new to this industry and has to be considered a key success factor for supplier in a highly competitive environment.

● In the EU area there is not a localization constraint, which increases competition for extrusion companies.

● When considering the Total Cost of Ownership, Chinese and European suppliers are evenly balanced.

● Suppliers should propose cost-saving actions and challenge their customers throughout the production process.

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“What you want is not suppliers, but experts that should be able to recommend, and not to take the requirements and give a price, but to challenge them”.

Object industry: Building and constructionObject position: General manager (Jifera)

Key takeaways

● Operate by themselves● They want a company with a strong know-how● It is easy to change provider of aluminium in this industry● They need a guarantee that the products are aesthetically satisfying● Important to purchase from a provider with a good reputation.● Support, time and quality are the most important factors● They require much time and attention

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How can SAPA gain a leading aluminum extruder position in the Spanish market?

Our problem definition is created to further understand how SAPA effectively can gain a leading position in a highly competitive market situation

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11. Global conclusion11.1 Problem definition

• Sapa is positioned in the most competitive extrusion market in the European Union.

• There are low entry costs, but high exit costs in the Spanish market.

• Sapa has an outdated form of internal communication compared to their Norwegian mother companies, which increases decision-making time, due to a lack of trust in the technology.

• Long-term relationship focused culture is essential to thrive in the Spanish extrusion market.

• There is a lack of transparency in the Spanish market, exemplified by the black market, and a limited use of forecasting.

• The added value is provided through a differentiated extended product. Shortly put, Sapa is focusing on improving their bundled product.

• The commodities market has gone from a price-focused to a co-creative selling process.

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11.2. Problem definition context

Sapa are positioned as number seven in terms of revenue* in the Spanish market and need to develop their relationship with relevant stakeholders. After a successful restructuring of the entire company, they can now focus their available resources to achieve a leading position by improving technology, communication and image.

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11.3. Answer to problem definition

*based on figures from 2013 in comparison to their competitors

• Logical areas for brand growth

Within Precision Tubing, Sapa produces and sells specialized products that are used in heat transfer applications, principally for the automotive market, which serves about 75 percent of the entire market for precision aluminum tubes. Precision tubing is also partaking in the growing market for replacing copper with aluminum in the HVAC-R industry and applications for transporting liquids and gases.

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12. Strategy12.1. Frame of reference

• What business are we in?• Extrusion• Building systems• Precision tubing

• What businesses should we be in?• Extrusion• Building systems• Precision tubing

• What businesses should we not be in? Investments made in building and construction should be done strategically due to it being a market in slow growth since the recession. Although Sapa’s Extrusion Europe business area experienced a stable market in 2015, but with slightly lower shipped volumes than last year. The profitability is driven by an improved cost base, higher margins, and increased profitability in fabrication.

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12.2. Identify potential substitute products and other competitive threats

• Potential Substitutes• Steel• Plastic (PVC)

• Competitive Threats• No transparency in the industry makes ”cheating”

easier. By this we mean competitors that are employing workers with no work visa and paying them an unfair amount, thereby reducing their costs.

• Higher productivity amongst competitors makes them able to sell their high-qualityproducts at lower prices.

• The plastic (PVC) industry market themselves more aggressively than aluminum and clam they have a higher strength-to-weight ratio.

Aluminum can be a substitute Material Pros ConsSteel Stronger Expensive

CorrosionPlastic Cheaper Toxic Copper Electricity

conductionVery expensiveHeavy

Wood Cheap Short life cycleAluminum combines all the pros from each of themand extrusion is a cost-effective addition to other techniques, such as forging and injection molding.

“Deliver profitable grow through growth through good organic development complemented by strategic acquisitions

of companies and alliances that further strengthen our market positions”

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12.3. Mission statement

Risk

Medium

Profitability

Medium

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12.4. Risk-profitability binomial

• There is an intense competitive environment in the Spanish market but Sapa is a big company with resources and capabilities (e.g. know-how).

• There are high entry costs (Machine presses, approx.: € 25 million), but the macroeconomic environment in Spain is improving, which reduces risks.

• The company has several new plants under construction in other parts of the world which indicates their willingness to take risks.

• On the basis of these facts, the binomial is at a mediumrate.

• Sapa is continually investing in R&D to obtain a competitive advantage. By discovering new ways to implement aluminum as a substitute product, they can gain profitability in new markets.

• There is an intense competitive environment in Spain but the company is working in an economically improving area.There are diverse set of customers in the various industries where aluminum can compete.

• On the basis of these facts, the binomial is at a mediumrate.

The risk-profitability binomial is affected by a few factors that are crucial for the aluminum industry, which are shown under:

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12.5. Corporate objectives

• Sapa’s corporate objectives are divided into customer first, trustworthy, one company, entrepreneurship and accountability.

Customer first - We see the world through our customers’ eyes. We anticipate their needs and move fast, locally and globally, to deliver excellence. Sapa sees the importance in focusing on being a customer centric company, customers are what drives them and keeps them profitable. Sapa bases its business concept on very close collaboration with the customer and they meet them wherever they are.Trustworthy - We do what we say we will do. We act with integrity, communicate openly, and treat others with respect. A company you can trust is a company you can work with. Sapa wants their customers to know that they are a credible partner to do business with.One company - We know that we work better when we work together. We share our knowledge and energy to ensure that we achieve our collective and individual aims. Sapa aims to be one company with shared values and goals, they might be a global firm based, represented all over the world, but they work as one.Entrepreneurship - We drive the business as if it were our own. We are agile and focused on results when carrying out new initiatives. Entrepreneurship is a bold thing to do, but Sapa strives to always stay ahead and be a flexible company.Accountability - We take responsibility for our actions. We make decisions and stand behind the results, good or bad. No company is perfect and not all decisions made are the right ones and Sapa admits that they are accountable for any wrong-doing from their side.

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13. Target Market13.1. Frame of reference

Wood

Copper

Potential customers in:

1. Building Systems2. Transport3. Building and Construction

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13.2. Who

13.3. What

The needs that needs to be fulfilled

1. Functional2. Design

Function

• Quality• Formed into any functions and shapes, Waterproof, Corrosion resistant, Immune to the negative effects of UV-Rays, High strength-to-

weight ratio, Non-toxic, Durable, 100% Recyclable • Predictability

• Delivery time• Advantage

• Time-Sensitive• Financial security after a time when 52% of the aluminum extruders went bankruptcy

• Expertise• Know-How and local expertise combined with global network benefits• Global network which provides R&D capabilities, which detect new areas of use and how the aluminum can be a substitute

Design

• Flexibility• Formability of the profiles• Guarantee Unlimited design potential• Customized profiles

• Esthetics• Coating

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13.4. How

Macro segment 1 Macro segment 2 Macro segment 3

What Design Functional Functional

How Aluminium Aluminium Aluminium

Who Building systems Transport Building and Construction

14. Macro segmentation14.1. Summary of who, what and how

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14.2. Macro and industry segments

Buildingsystems Lighting Thermal

management Ventilation

Transport Automotive Commercial transport

Public transportation

Building and construction Residential Offices Industrial

buildings

• The macro segment building systems is divided into three micro industries lighting, thermal management, land ventilation (HVAC&R). • Macro number two, transportation is divided into; automotive, commercial transport like trailer parts, and rolling stock body structures and

public transportation like subway cars and trains.• Macro number three, building and construction is divided into residential, offices and industrial buildings.

• The reasons for picking these micro industries are that according to Sapa’s annual report, growth rates decreased in 2015 , especially in the building and construction segment, there is therefor a potential for improvement and more extruders will try to enter the higher-end industrial and automotive segments, which makes a clear focus strategy vital for success.

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14.3. Solution life cycle

MS1MS2 MS3

Macro segment 1 -Building systems

Macro segment 2 -Automotive

Macro segment 3 –Building & Construction

LIFE CYCLE: Shake-OutWho: LightingWhat: DesignHow: Aluminum

LIFE CYCLE: Shake-OutWho: AutomotiveWhat: FunctionalHow: Aluminum

LIFE CYCLE: Shake-OutWho: B&CWhat: FunctionalHow: Aluminum

IntroGrowthShake-Out MaturityDecline

Phase of the PLC

Macro- marketing environment Priority strategic objectives Marketing program

Shakeout - Growth at a declining pace- Target majority of the market- Weakest rivals start dropping

out- Second generation

technologies emerges

- Target specific segments- Maximize market share- Position brand clearly- Create and maintain brand

loyalty

- Differentiation based on segmentation

- Intensive distribution- High price and value

pricing strategy - Brand positioning

communication

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Factors Explanation

Market growth Growth: Decelerating ( but still above average general economy)

During and after the crisis, the market growth have been reduced

Technological changes

Slowly Increasing There have been few technological changes due to: low or none investments in R&D. Resources have been used to survive or invest in more equipment

Segments Many: Target group are the majority of the market.

Today there is few segments in the lightning industry. During the turbulent market it is hard to get overview

Competition The industrial sector are more concentrated Weakest competitors are dropping out because of reduced market prices.

Short-contracts: Change suppliers rapidly after better offers due to cost, service, delivery time etc.

Profitability Erratic/Small Result of the high competition: low margin as possible to survive and gain customers

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14.4. Macro segment 1 – Building systems Phase:Shake-Out

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Factors Explanation

Market Growth

Growth: Decelerating ( but still above average general economy)

As a result of the innovation in the automotive industry, the aluminum used in cars have been more attractive because of its features such as light weight = Saves fuel

Technological Changes*

Slowly Increasing The technological changes have been few. Due to the The trend of electrical cars, more and more parts of aluminum are possible because of new and stronger aluminum mix.

Segments* Many: Target group are the majority of the market.

The automotive industry are changing fast, and so are the segments. The segments are growing in size and numbers. E.g.: low cost cars in emerging markets have opened up the possibility to blue ocean markets

Competition* The industrial sector are more concentrated Weakest competitors are dropping out because of reduced market prices.

Competition are high because there are many aluminum producers in Spain, which produce parts to the automotive industry. Also the market are increasing after the crisis.

Profitability Erratic/Small Because many of the companies, like SAPA, can deliver products of a certain quality, due to sophisticated R&D. A result is high profit. We also find longer stable and secure contracts, which raises the security

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14.5. Macro segment 2 – Transport Phase:Shake-Out

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Factors Explanation Market Growth Decelerating (But still above average

general economy)B&C segment are growing 0,7% regarding EU-report

Technological Changes

Slowly Increasing There are few technological changes, because of use of resources to survive in the market, rather than innovation. But the industry see more and more the advantage in use of aluminum due to the climate: Pollution and rust resistant

Segments Many: Target group are the majority of the market.

Segments have decreased and there are fewer B&C companies due to the high risk in the market

Competition The industrial sector are more concentrated Weakest competitors are dropping out because of reduced market prices.

Because of the smaller amount of customers, the competition have been very hard, if not hardest to B&C. Most of the aluminums providers produce to this industry

Profitability Erratic/Small For those who are still in the game they are perceived as predictable, which is important to the customers. And they are growing to the experience customers must have with the large suppliers

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14.6. Macro segment 3 – Building and construction Phase:Shake-Out

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• We discovered that all three macrosegments are to be placed in the Shake-out phase of the product life cycle du to the change in demand of the products, which are increasing in a slower rate. This is not only because of the crisis that affected the aluminum industry in 2009, but also the very high number of competitors in the market. A result of the crisis was little investments in R&D to develop new areas to use aluminum. In this field SAPA has had a big advantage of being a global company, and benefited from their international R&D outcome. Another result from the economic crises in Spain, was the low prices on aluminum, and many companies went bankrupt and are still losing to the larger companies which can conquer the smaller ones and offer lower prices due to having the advantage of being economies of scale.

• The reason for being in the shake-out phaseThe race and chase for profits are hard, the companies are fighting to survive price wars, and the larger firms are pushing out the smaller ones. The competition is more concentrated than ever and profits are unpredictable in all the three different macrosegments. The demand for aluminum products are growing but at a slow rate, because their customers are afraid of going bankrupt as well, so the target market is the majority of the groups, especially for Sapa who strives in being a Premium provider.

The shake-out phase has led to a price war for the customers, that need most of all; a low price. As Lambin recommends, in a shake-out phase, Sapa needs to redefine their priority objectives in two new directions: 1. Shift their strategy from developing primary demand to build up and maximize market share. 2. Market segmentation must guide the policy to differentiate the firm from «me-too products» and to move away from the core market. The majority rule has become the majority fallacy. To achieve these directions in their new priority objectives, Sapa must segment the market to identify priority target segments. This can detect new segments and help them maximize market share in the target segments. During this process it is important to build and position the brand clearly in consumers’ mind and from there create and maintain brand loyalty among new and existing customers. This is important to all the three macro segments.

• The marketing program will be1. Product differentiation guided by market segmentation. 2. Expansion of distribution to obtain maximum market exposure. 3. Pricing based on the distinctive characteristics of the brands. 4. Advertising to communicate the claimed position to the market.

14.7. Shake-out phase

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KSF Level Distinctive competence Is it a distinctive competence for our company?

Innovation High R&D departments and control centers

Yes

Price Low Superior efficiency -economies of scale. Superior quality – higher price at lower costs

No, Could be improved

Communication process Medium User-centric networks, High skilled workforce, Follow up system, market intelligence (best industrial practices)

Yes, could be improved

Liability allocation (risk allocation)

Low Financial healthy: Low debt No, Could improve

14.8. Key success factors and distinctive competences- Macrosegment 1 – Building systems

63

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Whole supply chain provider Medium Internal supply chain management


Communication process Medium User-centric networks. Yes, could be improved

Flexibility High Economies of scale, Flexible production capacity

Yes

14.9. Key success factors and distinctive competences - Macrosegment 2 – Transport

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14.10. Key success factors and distinctive competences - Macrosegment 3 – Building and transport


Communication process Medium User-centric networks, technical educational background,

Yes

Consistent Quality High Quality control center, Marketing activities


Liability allocation (risk allocation)

High Low debt, Financial + assets Investments

Yes

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FACT OPPORTUNITY THREAT STRENGTH WEAKNESS TO DO

- The recession in Spain Produces

customized products

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15. Strategic SWOT analysis


- Newentrants

- Sapa has a strong challenger position.- Very strong brandname.

67



68



- Customershave short-term contracts with their providers

69



- Communication between customer and provider is slow and old

- Establish partnership with customers- Modernizecommunication channels.

70



- Customersdemand of quick delivery time

71



- Customers want more involvement from idea to delivering phase

72



- Competitorsemployees are more productive

73



- There are low entry costs but high exit costs in the Spanishmarket

- Increase market share- Avoid price wars

-

74



- Customerswant to be contacted / visited more often

75


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16. Conclusion Porters 5 forces

Threat of new entrants (Low) Few to no entrants, reputation matters, while authorization and patents creates high entry barriersThreat of substitutes (Low) Aluminum is entering other commodities market, such as steel and not the other way around. The switching cost is high considering the price of dies and other start-up costs. Bargaining power of buyers (High) There are several providers of aluminum aluminum profiles, effectively increasing the bargaining power of buyers. However, the customers tend to be loyal to their suppliers, due to long-term relationships, and the cost of a die along with other start-up costs lowers their bargaining power.Bargaining power of suppliers (Medium) A historically low aluminum price combined with a relatively generic product lowers the bargaining power of supplier. There are few suppliers which increases their bargaining power. Industry Rivalry (High) There are several competitors in a market with low growth rate, little to no transparency, lack of governmental control heading towards a price war, while having high exit costs.

Competiveness of the Industry: HIGH

17. Choice of competitive strategy - Company

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17. Choice of competitive strategy - Company

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• DifferentiationSince Sapa are targeting a leading position and they can not compete on low price compared to their competitors, Sapa should focus on a differentiated strategy to give distinctive qualities to their products and their know-how service, such as highly sophisticated R&D and innovation.

These should be significant to the buyer by creating services and products, which are perceived as more unique than their competitors products and services. Sapa has today the resources and capabilities to meet the critical success factors and need to use their potential to differentiate themselves from their competitors. We consider these critical success factors to beflexible, whole chain provider, efficient communication and security in deliverance and financial, all are aspects to deliverconsistent quality.

Sapa should differentiate through a new brand image, technology and customer service. Since the name «Sapa» only have existed three years in Spain, we consider important and highly beneficial to provide the customers with a «new» strong brand name. This will create a brand loyalty with their customers and decrease the price sensitivity among the customers. This should also make it possible for Sapa to increase margins and avoid the the price war, which they are facing today. As Lambin recommends, they should heighten the entry barriers by making it hard for competitors to overcome the uniqueness of the company. Sapa has the unique position to combine the “new” (flexibility) with the “old” (experience). The differentiation strategy demands large investments in operational marketing, to communicate their distinctive qualities, compared to the competition.

Market Penetration

Market Development Diversification

Product Development

ProductsExisting

Scope for Leverage

NewM

arke

tsN

ewEx

istin

g

High Low

Scope for LeverageH

ighLow

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18. Choice of growth strategy – Ansoff Matrix

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18. Choice of growth strategy – Ansoff matrix

• Market penetrationWe chose the market penetration strategy because Sapa needs to fully exploit the opportunities offered by its products within their reference market. Due to the very high competitiveness in the aluminum industry, Sapa needs to try to maintain and increase sales in existing markets by efficient implementation of these 4 penetration strategies:

1. Market share increase strategy, by attracting buyers from competing brands by significant spending on marketing activities to improve service offering (communication improvement), significant reinforcement through distribution and service network (knowledge sharing platform) and invest majorly in promotional efforts (5p’s PR) 2. Market acquisition (defensive/maintain the level of market penetration)- Acquire competitors to obtain market share

The next two are defensive strategies which we advise to consider, in reply to the high competitiveness.

3. Market rationalization (Modify market by cost and/or marketing effectiveness by concentration on most profitable segments and use of most effective distributor (logistics-channels).4. Market organization, Sapa as a powerful company could help prevent the black markets in Spain by influencing the government to make the industry use legally accepted practices. Together with aluminum association in Spain they could push forward to establish industry rules guidelines under government supervision. They should also consider creating a joint-marketing research organization to improve information systems .

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19. Competitive attitude

• To detect and recommend the best competitive attitude for Sapa, we have considered the competitors position and behavior. Through the M. Porters 5 forces analysis of the competitiveness of the industry we found the industry as highly competitive and therefore Sapa needs to differentiate themselves to grow. Through the competitor financial analysis we found Sapa to be in the Medium-sized group, and detected their closest competitors and their competitive advantages, which we summarized to be economies of scale. We have set the strategy based on a realistic assessment of the forces at work, and to determine the means to achieve defined objectives.

Lambin defines the market leader to have a dominant position and is acknowledged by their competitors. We consider Sapa to have the potential to achieve this. Sapa are a global ethic company and acts as a role model for others in the industry. They should continuously consider imitating attacks from competitors.

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• Offensive Strategy• The object is to reap the benefits of experience effect to maximize and improve profitability. The strategy is based

on the assumption that market share and profitability are related. Another beneficial result in this dominant position is that it attracts the attention of public authorities who are in charge of maintaining balanced competitive market condition. But they could be more vulnerable to i.e.. Labor organizations. There is a limit related to how high costs Sapa can have, before being pushed out of this market.

• To achieve their goal to be a leader in the market it is natural for us to conclude with the Market Leader strategy, which is the best strategy for SAPA. We define Sapa’s capabilities such as economies of scale (global company/joint venture-backed), innovative production processes through R&D (E.g. Friction Stir Welding) and their flexibility by benefits from being a multinational company, to conquer in the aluminum industry in Spain. After analyzing the strategy we have found out that Sapa are too slow by using a pull strategy. Compared to their competitors, Sapa has very small sales force. Sapa has the potential for growth and development therefore we will recommend Sapa to change their attitude to a more offensive strategy.

Expected result from this strategy• Increase profitability• Increased market share

19. Competitive attitude

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20. Segmentation strategy20.1. Criteria for efficient segmentationThe aim objective of the micro-segmentation is to analyze the diversity of the customers requirements in a detailed manner within each of the macro segments. We have discovered that differences lie in organizational demographics, operating variables, personal characteristics to the customers and purchase approaches. Our goal with the micro segmentation was to uncover customer groups searching for the same benefits and needs of the products Sapa can offer. Since Sapa is an industrial B2B company, it is natural to share the needs of the various sectors. When fulfilled criteria's:

Differential response: The segments must be different in terms of their sensitivity to one or several marketing variables under the control of the firm. We have specified the benefits sought in the table on the next slide, followed by the microsegments most important benefit sought and an explanation of the segments and the factors to decide the main benefits sought: “Breezes” micro segment: For this micro segment its about the features of the products, that differ from the substitutes, such as corrosion resistance. “Automobiles” micro segment: these customers have a strong need for innovation in order to find new areas to use aluminum, to replace parts of the cars with high “weight-to-strength ratio”. “Houses” micro segment: after the crises in 2009 the need for a good reputation and trust has become the have be most important benefit. We specify these needs later in the segmentation strategy.

Adequate size: Identified segments must represent a market potential large enough to justify developing a specific marketing strategy.: Sapa extrusion Spain targets companies with operating revenue from €20M and have a total of 1600 customers. From the primary and secondary research we found that the closest competitor has 3000 customers. Based on the benefits we can conclude that the macro segments potential are capable to meet the requirement of €20M in operating revenue.

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Measures: We must be able to measure the variables we use in our segmentation. Finding information about size, purchasing power and major behavior characteristics has been difficult due to abstract variables and the low transparency in the industry. Based on our primary research we have been able to measure the most important variables for each microsegment. We cannot conclude that these assumptions are representable for all the participants of the microsegments. Variables used for the all the customers of Sapa are the company size, in terms of turnover over €20M. Further on, these have been divided into the different industry sectors, these factors have not been easy to measure and hard to find information about.

• Variables measured for “Breezes” • Variable: Purchase: Measured through the number of customized products, due to their industry which is project based, and require

further possibilities for customization. • Variable: Technical requirements: Measured by the degree of their need in technical features with the products such as corrosion

resistance, durability, waterproof etc. compared to the substitutes. Their technical requirements have also been measured by their need for their demand in innovation solutions.

• Variables measured for “Automobiles” • Variable: User status is measured through consistent quality in the number of errors in the deliverances regarding how satisfied the

customers were and their willingness to repurchase.• Variable: Level of technology is measured in their demand for high quality and the aesthetics of the products. We have also measured the

level of technology by the resources allocated to R&D departments.

• Variables measured for “Houses” • Variable: Buyer and seller relationship is measured by their reputation in the industry by the number of years in the market. • Variable: Risk perception has been measured in their loyalty and repurchase rate.

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Accessibility: Refers to the degree to which a market segment can be reached through a unique marketing program. We have selected the criteria to be controlled coverage. Because Sapa must efficiently reach their target customers and waste little time covering firms who are not potential buyers. This gives them the control of who they are targeting and can efficiently select their customers. This is consistent with the differentiated strategy. We consider accessibility for the 3 micro segments as very good, after seeing how customers react to similar initiatives from the competitors. After having detected the different needs in the different segments, Sapa’s customers can be controlled with a more aggressive attitude strategy and by implementing a specialized marketing mix for each of them they should be able to increase the number of customers.

Actionability: In the marketing mix we will recommend a set actions to take for each of the selected micro segments.

Based on the reasoning for all the segmentation criteria's for the three microsegments and will present the positioning strategy and actions to take in the marketing mix.

• On the next slide we have listed up all the benefits sought in the different macrosegments to detect the differences in the microsegments. We have used the standard segmentation factors framework for B2B markets from Lombard:

Organizational demographics: We specify the industry sectors, geographical location, Spain. Operating Variables: Level of technology, user status and customer capabilities. Personal Characteristics: Motivation, buyer and seller relationship and risk perception.Purchasing approaches: Decision center organization, purchasing policies and purchase criteria.

Macro segment Building systems Transport Building and constructionMicro segment Lighting Thermal

ManagementVentilation Automotive Industrial

transportPublictransport

Residential Offices Industrial buildings

Benefits SoughtShapeability 4 3 5 5 5 5 4 3 2Waterproof 1 2 3 5 5 5 5 5 5Corrosion Resistant 3 3 5 5 5 5 5 5 5UV-resistant 1 1 3 5 5 5 5 5 5Strength/weight ratio 1 1 2 5 5 5 5 5 5Non-Toxic 1 1 1 1 1 1 1 1 1Durability 3 4 4 5 5 5 5 5 5Recyclability 1 2 2 5 5 5 1 1 1Response time 4 3 3 4 4 4 4 4 4Expertise/know-how 2 4 2 5 5 5 4 4 3Flexibility 3 2 3 4 4 4 4 4 4Aesthetics 5 2 4 5 4 4 5 5 3Innovation 2 3 1 4 4 3 4 4 3Consistent quality 3 4 5 5 5 5 5 5 5Price 5 3 4 2 2 4 3 3 3Reputation 2 3 2 4 4 4 3 3 2Delivery-Reliability 3 4 3 5 5 5 5 5 5Contract Length 4 3 4 2 2 3 2 2 2Storage 1 2 4 2 2 2 3 3 2Co-creation 2 4 2 4 5 3 4 4 4Service 3 4 2 5 5 5 4 4 4Risk allocation 1 3 3 4 4 4 5 5 5R&D 1 1 1 5 5 3 2 2 2Score 56 62 68 96 95 94 88 87 80

Values:1(Notimportant)to5 (Important)20.2. Choice of segmentation criteria – Benefits Sought

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We chose to continue with these micro segments which have the greatest potential in each macro segment.

Macrosegment 1– Building systems- Lighting- Thermal Management- Ventilation

Macro segment 2 - Transport- Automotive- Industrial Transport- Public Transport

Macro segment 3– Building and construction- Residential- Offices- Industrial Buildings

21. Segmentation – Macro and micro

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Building systems

Renamed: Breezes

CustomizationCorrosion resistantConsistent quality

Renamed: Automobiles Renamed: Houses

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Ventilation industry

Transport

Automotive industry

B & C

Residential buildingsindustry

21. Segmentation – Macro and micro

InnovationAestheticsHigh quality

Know-how

CustomizationAestheticsReputation

Storage

Macro segments

Industries

Micro segments

MainBenefit sought

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21.1. Factors to decide micro segments

• From the macro segmentation we found a total of 9 industries and out of those 9, we have chosen one industry in each one of the macro segments and thereby found the micro segments.

• We did this by implementing the results from the primary research and then creating a grid where we placed all the benefits sought that were relevant for the industries. Then we rated all 23 benefits sought to every industry with a score between 1 and 5, where 1 is “not important” and 5 is “important”. Finally we summed all the scores and found the 3 micro segments which we named:

- “Breezes” (ventilation industry) Macro segment 1 - Building systems- “Automobiles” (automotive industry) Macro segment 2 - Transport- “Houses” (residential buildings industry) Macro segment 3 – Building & Construction

• Benefits sought explanation: a very effective segmentation method for companies that offer products that have unique features, and this allows them to identify which products/service they should offer and which benefits they should promote. It’s also an effective tool for the larger companies who want to break down the market to multiple market segments, in order to reduce the threat from their competitive rivalry.

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21.2. Factors to decide main benefit sought

• Within the 3 micro segments, there were a few benefits sought that scored the highest within all of them. Out of these few benefits sought, we found 1 main benefit sought that we believe is the one that is most relevant for that specific micro segment.

• Breezes – main benefit sought: Technical feature - Corrosion resistant: during our secondary research we discovered that in the ventilation industry there is an ongoing copper to aluminum substitution process, due to the fact that aluminum does not corrode. Aside from that, HVAC&R (heating, ventilation, air condition & refrigeration) is the second largest market for Precision Tubing and it grew by around 50 percent in 2014 and 24 percent in 2015. According to the Sapa annual report, the HVAC&R market still represents considerable potential in substituting copper with aluminum and this is something Sapa excels at.

• Automobiles – main benefit sought: Innovation: innovation is first of all part of Sapa’s vision; We are aluminum. Excelling in technology and innovation. Today and tomorrow. Sapa – Innovative aluminum solutions.It’s mentioned twice and it’s a tremendously important part of their added value/augmented product. Sapa has a strong focus on being at the forefront of innovation through its unmatched resources within R&D. A great is example is the partnership with Tesla, with the Model X which is an electric car that required a strong and lightweight material that could be easily incorporated into the cars design. Innovative solutions were the result of this co-operation, and it allowed the Model X to exceed the highest safety requirements and maintain its position as a leader in high-performance long-range electric vehicles.

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21.2. Factors to decide main benefit sought

• Houses – main benefit sought: Reputation: from our primary research we discovered that in the residential buildings industry, the main benefit sought for the consumers is a company with an exceptional reputation. In business to business sales the most important marketing tool is word of mouth, and in the building and construction segment, the customers are known to communicate often with each other and share information like wildfire. The companies that deliver an on-time core product of great quality and service, are the ones that excel in this industry. Reputation must therefor be upheld and strengthen at all cost by Sapa.

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After defining the mentioned criteria's for our segmentation, we have identified one strategy for each of the micro segments, which we consider to have the greatest potential, we would recommend Sapa to focus on.Based on the benefits sought shown in the grid earlier we have found the most important benefits sought to each micro segment.We believe it is very important for Sapa to take into consideration the micro segments that have been chosen. This is mostly because of the solution life cycles they are in the growth phase. We have therefore chosen to use a differentiated focus segmentation strategy.

Differentiated focus• This strategy involves developing different market mixes to each target segment, in the sense of following a specialized

strategy• The consumers in each micro segments are heterogeneous because they appreciate one specific benefit over the other, they

share the need for added value, but different types as explained in the previous slide.• This means that each of the micro segments need their own marketing mix, as they react differently to the same stimuli.• This will be examined further when deciding the marketing mixes.

22. Choice of segmentation strategy

22.1. Microsegments in Building Systems

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Cost leadership Differentiation

Cost focus Differentiation focus

Broa

dN

arro

w

Scop

eCost Differentiation

Benefits sought:- Customization- Consistent quality

Distinctive competences:- R&D departments

and control centers- Superior efficiency -

economies of scale. Superior quality –higher price at lower costs

- User-centric networks, High skilled workforce, Follow up system, market intelligence (best industrial practices)

- Financial healthy: Low debt

Main benefit sought:- Corrosion resistant

22.2. Microsegments in Transport

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Broa

dN

arro

w

Scop


Benefits sought:- Aesthetics- Consistent

quality- Expertise /

Know-how

Distinctive competences:- Internal supply

chain management

- User-centric networks.

- Economies of scale, Flexible production capacity

Main benefit sought:- Innovation

22.3. Microsegments in Building and Construction

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Broa

dN

arro

w

Scop


KSF:- Customization- Aesthetics- Storage

Distinctive competences:- User-centric

networks, technical educational background,

- Quality control center, Marketing activities

- Low debt, Financial + assets Investments

Main benefit sought:- Reputation

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23. Positioning strategy23.1. Positioning map – Price to Innovation

High priceLowprice

High innovation

Low innovation

*This emphasizes the way we wish to be perceived by our consumers

*

• The positioning map helps to identify who our competitors are and how they position themselves strategically.

• The competitors on the positioning map are the ones that are directly linked to Sapa in terms of similarities in what they offer. The order they are placed on the map is based on our primary and secondary research in context with how Sapa’s customers perceived them.

• In order to position Sapa, we have chosen the variables price and perceived innovation.

• Our recommendation is to increase Sapas perceived innovation and stay constant on price.

• By choosing a “challenge the leader” strategy, Sapa can rise above it’s competitor Cortizo, and be perceived as a more innovative company and at the same time offer a competitively lower price.

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• Lambin defines positioning as “the decision of the company to choose the benefit(s) that the brand has to put forward to gaina distinctive place in the market”.

• In order to position Sapa, we have chosen the variables price and perceived innovation. • Based on our research, the map shows how the different consumers perceive Sapa’s main competitors, the target public are

Sapa’s three micro segments, “breezes”, ”automobiles” and “houses”. • Our recommendation is to increase Sapas perceived innovation and stay constant on price, still offering a premium price but

justified by the level of satisfaction it offers to the consumers, a premium level compared to the competitors .• Sapa has the required resources to occupy and defend the premium position, being a global company with strong parent

corporations, it’s resources are nearly boundless, therefor there is no need to recommend a plan B in case of failure.The Sapa group has innovation in its vision and invests a great deal for the brand to be perceived as such and this can be implemented globally.

Perceived price and perceived innovation • By offering products that include the main benefits sought; corrosion resistance, innovation and reputation, we cover the

needs of our three micro segments. We believe these variables are essential for Sapa in order to strengthen their current competitive position in these markets. Sapa will be perceived as a brand that delivers products with a premium level of innovation to the consumers with a competitive price. When the consumer segments think of innovation they immediately link Sapa as the brand that delivers outstanding innovation

23.2. Positioning strategy for Sapa

• The B2B market implies a typically Pareto customer distribution, also called the 80:20 rule, which means that it is critical to communicate the value-added services, as identified in the research and strategic part .

• One important feature of the B2B market is the importance placed on relationship building. This leads to a relatively high expenditure on people, while typically lowering the budget of promotional efforts.

• The quality of the market intelligence is critical to compete in B2B markets. It is therefore advisable to undertake detailed market research while combining it with continuous internal customer data, to get a clear picture of the market.

• It is critical to have a coherent brand that stakeholders can relate to instead of several sub-brands, which might be more effective in B2C markets, e.g. FMCG markets.

We have chosen a focused differentiation strategy as our segmentation strategy. This implies that we develop three marketing programs, one for each micro segment. However, there are some activities that can be used by tailoring it to the respective segment, e.g. attending relevant fares and trade shows.• Breezes• Automobiles• Houses

98

24. Marketing Mix

98

We have to consider the segments position in the solution life cycle and tailor the marketing efforts accordingly. All three segments are placed within the Growth Phase in the cycle. This implies an image building communication program to secure long-term brand/corporate loyalty.

In order to develop a marketing plan that is in accordance with our strategic analysis, it is necessary to consider points from the growth strategy section categorized under market penetration:

• Market share increase strategy - Focus on attracting buyers from competing brands by improving service offering • Linking the brand to innovation, as shown in the positioning map with promotional efforts • Significant reinforcement through distribution and service network - knowledge sharing platform

• Market organization - Influence using legally accepted practices • Establishment of industry rules (guidelines / blade market) under government supervision • Creating joint-marketing and/or research organization to improve information system

99

24. Marketing Mix

99

In summary, we propose a three-pronged focus in our marketing mix:

• Educational• We are aware that B2B customers in general tend to have a good or even better understanding of the

product/solution than the company they purchase from. The purpose of this focus is to educate our customers, current and future, about Sapa, its products and services.

• Awareness• A single corporate brand, communicated in a clear and concrete manner is essential, now that Sapa have

completed their restructuring phase in Spain.

• Image enhancing• Our strategic analysis showed that the the link between the brand and their main expertise, innovation, needs to be

communicated clearly, in order to be consistent with the company vision.

100

24. Marketing Mix

100

101

24.1. Marketing mix – People: Common for the three microsegments

• People• The market is today growing economically therefore we recommend to increase number of sales people to capture a higher market share

and grow into a leading position.• The required level of competence and education in this industry is high, Sapa should make it attractive for talents to work at Sapa through

job advertisements and recruitment programs where Sapa points out their attractiveness as one of the best work places in Spain. • Sapa academy: Meet one week, four times a year for personnel training to update and report on products, each others in sales and

experiences and customer problem solving activities (what is working and what is not) and establish good teams through socializing activities.

• Feedback from these events should be systematically reported into an internal database for Sapa. They should also make a database, where the information is available for customers. This will hopefully increase the level of communication on a digital platform which allows Sapa to be more efficient for less money. This will result in a better and faster service experience, where it is easier to detect new needs from the customers. Sapa will be able to take a leading position and the first company to respond to new needs and trends in the market, because they are constantly surveilling their needs.

• One sharing platform internally for the global Sapa sales force and one sharing platform for customers and suppliers, both are online forums for sharing of ideas and best practices.

• This information will again be put in the CRM-system of Sapa, where they can specialize their service to each customers needs. • Sapa wants to brand themselves in Spain and one of the better and almost free solutions are case studies at colleges and universities.

This will attract future employees at different levels and sectors, who will at the end, benefit Sapa in different ways through word of mouth. We suggest that they should be present at different types of schools, such as business and law, technical, architecture and IT. Case studies will also provide free market research, which gives Sapa a competitive advantage.

101

• Place• Psychical environment:

• Sapa Academy, job fairs, invite students to guided tours at the plants, and all relevant types of colleges and universities in Spain.

• Traditional media• Magazines/trade publications

• Digital media• Advertisement on job sites (internet), RSS feed and e-mails, information-source database for customers, and one

internal for Sapa, with more confidential information, CRM-system to track each customers needs, social media in Spanish; (where they also can track the feedback and needs from customers) Facebook, Instagram, Pinterest, skype-channel to all relevant contact persons at Sapa such as KAM’s.

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24.2. Marketing mix – Place: Common for the three microsegments

102

103

24.3. Marketing mix – Breezes

• Price • The price elasticity in this segment is affected positively by consistently meeting the needs of customization,

quality and implementing relevant product properties, as stated in the micro segmentation . • LME, The London Metal Exchange, is highly volatile and defines a significant part of the raw material cost related

to production of the solutions. This in turn affects the profitability and the price flexibility we can offer to the customers.

• Product• Focus on customization possibilities with product properties and quality.• Sapa should focus on developing their added-value on top of the basic extrusion product, in order to attract the

profitable and collaborative type of customer(high involvement, willingness to share control) with the desire for a long-term engagement.

103

104

24.3. Marketing mix – Breezes

• Promotion• Psychical environment

• The company should attend trade attend trade shows such as Global Automotive Lightweight Materials Conference and The ALUMINIUM conference to understand coming trends, invite customers to their own events so that they can present their problems and needs. Sapa should also attend relevant regional industry fares such as VETECO (Madrid) to to create word-of-mouth and reinforce the brands proximity to the industry.

• Traditional media• It is essential to be present in relevant trade publication to increase the customers level of brand awareness.

They should also continue to produce their own publication, Shapes, to educate their customers on the various application on aluminum applications and solution.

• Digital media• Their internal communications channels, such as company intranet and home page, should include relevant

project references with successful customer co-operations, since referrals are essential to promote their capability of delivering innovative solution to this segment. It is valuable for Sapa to be present on the web and on social media as it creates brand recall with existing, potential and future(e.g. students that will enter a relevant field of work) while creating word-of-mouth. The benefit of this platform is to submerge the user in Sapa’s content and increase the loyalty of customers.Advertisement on job sites such as www.infojobs.net.

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24.4. Marketing mix – Automobiles

• Price • The price elasticity in this segment is affected positively by consistently meeting the needs of aesthetics, innovative

solutions without deviating from the expected quality level, as stated in the micro segmentation.• LME, The London Metal Exchange, is highly volatile and defines a significant part of the raw material cost related to

production of the solutions. This in turn affects the profitability and the price flexibility Sapa can offer to their customers.

• Product• Focus on aesthetics, innovative solutions with consistent quality and a emphasis on the collaborative participation

throughout the product development.• Sapa should focus on developing their added-value on top of the basic extrusion product, in order to attract the


105

106

24.4. Marketing mix – Automobiles

• Promotion• Psychical environment

• The company attend should trade shows such as Global Automotive Lightweight Materials Conference and ALUMINIUM to understand coming trends, invite customers to their own events so that they can present their problems and needs.

• Sapa should also attend relevant regional fares such as Motortec Automechanika (Madrid) and Salón Internacional del aùtomovil y vehículo commercial (Barcelona) to create word-of-mouth and reinforce the brands link to the industry.

• Traditional media • It is essential to be present in relevant trade publication to increase the customers level of brand awareness.

They should also continue to produce their own publication, Shapes, to educate their customers on the various application on aluminum applications and solution.

• Digital media • Their internal communication channels, such as company intranet and home page, should include relevant project references with

successful customer co-operations, since referrals are essential to promote their capability of delivering innovative solution to this segment.

• It is valuable for Sapa to be present on the web and on social media as it develops brand awareness to existing, potential and future (e.g. students that will enter a relevant field of work) while creating word-of mouth. The benefit of a platform is to submerge the user in Sapa’s content and increase the loyalty of customers.

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24.5. Marketing mix – Houses

• Price • The price elasticity in this segment is affected by with meeting the needs of customization related to e.g.

aesthetics, while delivering on the brands promise and implementing relevant product properties, as stated in the micro segmentation.

• LME, The London Metal Exchange, is highly volatile and defines a significant part of the raw material costs related to production of the solutions. This in turn affects the profitability and the price flexibility we can offer to the customers.

• Product • Focus on customization, aesthetics, reputation and storage• Sapa should focus on developing their added-value on top of the basic extrusion product, in order to attract the


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24.5. Marketing mix – Houses• Promotion

• Psychical environment: • The company attend should trade shows such as Global Automotive Lightweight Materials Conference and

ALUMINIUM to understand coming trends, invite customers to their own events so that they can present their problems and needs.

• Sapa should also attend relevant regional fares such as Construmat (Barcelona), Conference Européenne des villes durables (Bilbao) and Construtec (Madrid)to create word-of-mouth and reinforce the brands link tot he industry.

• Traditional Media • It is essential to be present in relevant trade publication to increase the customers level of brand awareness. • They should also continue to produce their own publication, Shapes, to educate their customers on the various

application on aluminum applications and solution. • Digital media:

• Their internal communications channels, such as company intranet and homepage, should include relevant project references with successful customer co-operations, since referrals are essential to promote their capability of delivering innovative solution to this segment.

• It is valuable for Sapa to be present on the web and on social media as it develops brand awareness to existing, potential and future(e.g. students that will enter a relevant field of work). The benefit of a platform is to submerge the user in Sapa´s content.

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25. Budget

109

26. Evaluation

110

This is a list of all do's and don'ts we have found during the writing of this bachelor thesis.

26.1 Do’s:

• Do the work in separate steps. The process felt shorter and easier to follow because it was split up into smaller parts. • Do the work together as a group. The quality of the results have been much higher when we

worked together.• Always book meeting rooms through the ESADE intranet a day before the scheduled group meeting.• Set up agendas before every group meeting and try to follow it so that the time is spent as effectively as possible and you

get an overview over what is done and what must be done.During the semester, there will be many planned tutorials with the professor, it is essential come prepared to every meeting, prepare questions and remember to take notes of everything that is said at each meeting, so you can get an overview of what you have to fix.Read as many other thesis's that might be relevant to your research in order to gain more knowledge within your specific field .

• We talked to some of Sapa’s employees to hear their opinion of how Sapa works internally. This is absolutely something everyone should, to understand the relationship between Sapa and their employees better.

26.2. Don’ts

111

• If you are doing in-depth interviews, start sending out emails and calling potential interview objects as soon as possible. We experienced that all the objects we wished to interview, responded our emails or called us back after a very long time and this resulted in fewer interviews than we had hoped for.

• If we had more time we would have tried to conduct quantitative research to make our resultsquantifiable. Even though we have confidence in our results this would have enforced themfurther.

• Don’t expect to get all relevant information handed to you, meetings, time schedule, syllabus and all other info on the bachelor thesis course was available to us in the ESADE intranet before the semester started.

27. Reference list

112

Internet● http://europa.eu/rapid/press-release_MEMO-13-954_en.htm● http://european-aluminium.eu/policy-areas/environment/● http://www.world-aluminium.org/statistics/● https://europeanclimate.org/transport-durable/● https://www.cosmeticseurope.eu/news-a-events/statements.html● http://www.politico.eu/article/chinese-walls-campaign-to-block-new-trade-status-china-juncker-malmstrom-timmermans-katainen-moscovici/● http://www.paconsulting.com/our-thinking/the-co2-emissions-challenge/● http://www.harboraluminum.com/● http://www.weee-forum.org/sites/default/files/documents/2012_movements_of_waste_across_the_eu_eea.pdf● http://www.wastematters.eu/uploads/media/EAA-Activity-Report-2011.pdf● http://www.facealuminium.com/ENG/Hot_topics/Market_current_affairs/luiss_face_press_release_duty.asp● http://www.alcoawheels.com/alcoawheels/north_america/en/pdf/Alcoa_Comparative_LCA_of_Truck_Wheels_with_CR_statement.pdf● http://www.constellium.com/● http://www.aluminium-messe.com/aluminium_2016_1.html?sprache=englisch● http://www.aluminum.org/statistics● http://www.aluminium-messe.com/abschlussbericht_-_mit_leichtigkeit_zum_erfolg_aluminium_setzt_bestmarken_54.76.html● http://www.ey.com/Publication/vwLUAssets/Measuring_cultural_and_creative_markets_in_the_EU/$FILE/Creating-Growth.pdf● http://www.eeb.org/index.cfm/library/report-delivering-resource-efficient-products/● https://www.foe.co.uk/sites/default/files/downloads/jobs_recycling.pdf● http://www.eurometaux.eu/DesktopModules/Bring2mind/DMX/Download.aspx?Command=Core_Download&EntryId=7154&PortalId=0&TabId=57● http://www.perceptualmaps.com/make-a-perceptual-map/free-download/

27. Reference list

113

● https://agmetalminer.com/2015/06/16/aluminum-price-forecast-june-2015-mw-premiums-at-it-again/● http://www.vannportalen.no/globalassets/vannregioner/sogn-og-fjordane/sogn-og-fjordane---

dokumenter/forvaltningsplan/hoyringsinnspel/interesseorganisasjoner/hydro-aluminium---hoyanger---vedlegg-niva-rapport.pdf● https://agmetalminer.com/2015/06/16/aluminum-price-forecast-june-2015-mw-premiums-at-it-again/● www.Sabi.com● http://www.slideshare.net/rahulranjan56027/aluminium-industry-35694352● http://www.prnewswire.com/news-releases/the-aluminium-market-analysis-financials-and-forecasting-2011-2016-131968763.html● https://www.b2binternational.com/publications/b2b-marketing/● https://hbr.org/2013/01/rethinking-the-4-ps/ar/1● https://vtldesign.com/inbound-marketing/content-marketing-strategy/percent-of-revenue-spent-on-marketing-sales/● http://www.marketingcharts.com/traditional/b2b-marketers-budget-allocations-in-2015-50732/attachment/forrester-b2b-budget-allocations-in-2015-jan2015/● http://www.investopedia.com/terms/r/revenueperemployee.asp?layout=infini&v=5C&adtest=5C&ato=3000● http://www.slideshare.net/alwynlau/bus169-kotler-chapter-06● http://www.sapagroup.com/en/extrusions-startpage/markets-and-applications1/building--construction/

Litterature● Co-creation: Prahalad, C. K (2004). "The Future of Competition: Co-Creating Unique Value With Customers.". Harvard business school press. Prahalad, C. K (2004). "The

Future of Competition: Co-Creating Unique Value With Customers.". Harvard business school press.● Lambin, J.-.J. .L.A.M.B.I.N & Schuiling, I.S. (2012). Market-Driven Management - Strategic and Operational Marketing. (3rd ed.). : Palgrave macmillan● Antony, J. and R Antony, J. and R . Banuelas (2002). "Key ingredients for the effective implementation of Six Sigma program." Measuring Business Excellence 6(4): 20-

27● Hill, C.H & Jones, G.J. (2008). Strategic Management Theory: An Integrated Approach. (9th ed.). Usa: Cengage Learning: 99-103

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1. Financial Data from 15 closest competitors

2. Interview Guide – Expert

3. Interview Guide – Competitor

4. Interview Guide - Customer

28. Table of annex

115

CompanyName

Operatingrevenue/turnover

Netincome Netsales Purchases

Workingcapital

ReturnonShareholdersFunds

(%)

ReturnonCapital

Employed(%)

ProfitMargin(%)

ProfitperEmployee

(Th.)

Aver.CostofEmpl./Year(Th.)

Long-termdebt

Totalassets

Tangiblefixedassets

Intangiblefixedassets

Numberofemployees

thEUR thEUR % % % % % % th th thEUR thEUR thEUR thEURLastavail.

yrLastavail.

yrLast

avail.yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yrLastavail.

yr1. ALUMINIOESPAÑOLSA 2267860 81764 66,63 74,41 75,03 36,38 36,71 5,29 163 50 1633 1704103 96836 2563 7372. ALUDIUMTRANSFORMACION

DEPRODUCTOSSOCIEDADLIMITADA.

418807 -10554 1,18 1,2 -0,28 -22,97 -16,67 -4 -21 54 1521 241120 80344 2396 782

3. ALUMINAESPAÑOLASA 394936 -36347 -1,5 -7,31 21,72 -11,85 -10,36 -6,93 -56 55 1421 362929 161534 4384 4864. BEFESAALUMINIOSL 251767 7920 8,96 -0,82 n.s. 19,02 13,98 4,06 40 50 45818 159110 40622 37102 2535. ALCOA INESPALSL 232653 218329 -29,2 18,44 134,97 16,13 16,04 98,51 2204 38 1936 1458715 n.a. 149 1046. ALUMINIOSCORTIZOSA 175667 5028 15,26 19,96 45,3 10,89 9,24 3,91 10 34 18748 127961 38672 84 6767. COMPAÑIA VALENCIANADE

ALUMINIOBAUXSL82918 -1736 16,18 16,61 -23,97 -12,57 -0,35 -3,55 -17 41 63160 124734 49581 137 171

8. SAPAEXTRUSIONSPAIN 171010 -31000 10,79 4,74 19,1 -17,3 -28,7 -19,6 -62 47 27589 113789 30363 116 5429. INDUSTRIASARAGONESASDEL

ALUMINIOSA60058 1010 32,74 39,22 11,04 10,33 8,55 2,4 10 40 4558 25144 6540 n.a. 143

10. AVALUMITRANSL 55687 1661 64,37 71,6 4,74 3,16 5,87 0,94 2 30 6808 42872 10491 9 25011. EXTRUSIONADOSGALICIASA 55612 708 17,43 20,61 3,94 2,88 3,1 1,57 4 25 211 46225 5469 23 21712. INYECTAMETALSOCIEDAD

ANONIMA54441 -1178 13,24 -0,8 n.s. 19,56 20,31 1,81 4 56 4264 39717 15015 58 234

13. ALUMINIOLAESTRELLASL 52460 356 11,22 9,46 19,92 5,77 6,08 1,15 17 39 3890 22551 4505 0 3514. IBERICADEALEACIONES

LIGERASSL51635 994 12,58 11,66 10,35 10,56 9,07 2,31 33 47 603 20975 2029 10 36

15. EXLQUINTAGLASSSL 50995 -2475 29,89 37,88 26,12 -26,12 -25,5 -6,77 -23 22 130 26562 4259 26 151

Annex 1

Annex 2 - Interview guide - Expert

116

- What do you think of the players in the industry?- What makes one better than the other?- Your thoughts on added value?- How is the distribution in the market?- How do you consider the Profitability in the market?- How do the suppliers contact their existing/potential customers?- For example SAPA, as an industry leader, how could they squeeze out new entrants in the market? - How important is trust/reputation in the alumina business?- What’s more important, price or added value?

- Do clients switch providers often, and why do they do it? Is because of price, quality of service, etc.?

- Is it normal to use ads?- What if the KAMs go out looking for potential clients, especially where aluminum can be a substitute?- Is the technology difficult to copy?- How are the licensing requirements today? Easier/harder?- Do most clients buy in small or large volumes?- Is the threat of substitutes high?- Is there fight for market share?- Are there high barriers to exit?- How would you consider the transparency in the market?How can the different players differentiate themselves?

Annex 3 - Competitor

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- Is it today easy to switch manufacturer?- Is it important to have a stable long-term contract for your clients?- What do you think of the other players in the industry (competitors)?- What makes one better than the other?- How are the prices of the product?- How is the distribution in your company, do you have your own trucks or is this done externally?- How do you consider the Size of market?- How do you consider the Profitability in the market?- And do customers appreciate the added value?- Reputation of company for you customers?- Reputation of product?- How important is the technology in the aluminum industry?- Is the customers’ sceptic to buy from new companies? - What is more important; added value or price?- Is it normal to use advertisement? - Are there players that tend to break prices these days?- How was this before the crisis?- Are there many restrictions/regulated industries in somehow?

- When we talk about power of provider, in your case Alcoa, do they change your prices often or are they fixed?- Do your customers buy in large volumes?- Do you have many or few clients?- Do you do price discounts?- Do you know if your competitors give discounts?- Is service important for your clients, and is there some sort of service that is better or worse with another player?- Are there high exit barriers in the industry; is it easy to get out?- What is more important for your clients, to be able to differentiate yourselves?- Can you mention any of these added values?- Is this contact done by your KAM’s? - Are there players playing unfair?- Are there many companies that have gone bankrupt, if so, why?- How do you consider the transparency in the business?- Is it easy to positioning yourself to your competitors?- Do you go looking for clients or do they look for you?

Annex 4 - Customer

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- What is important for you when you buy aluminum products?- How are your demands for the aesthetic of the products?- Is it today easy to switch manufacturer?- How do the providers motivate to buy from them? What can you tell us about the differences?- How do you experience the contact with the KAM?- Do you have internal experts to ensure quality products?- How can you be willing to pay more? E.g. more services such as; 24/7 services, faster delivery, improved customer service, faster production.- Have you used the same provider for many years?- Is brand name important to your customers?

- Is it important to have a stable long-term contract for you, or short-term contracts where you can switch providers more frequent?- What is important that an extruder provides/offers you?- What are you missing (wishes) in the process? Like for example more information, more know-how, availability, response time or service. - How is the aluminum market considered after the crisis in Spain?- How important is technology in the aluminum industry?- Is it normal to use advertisement, do you decide on provider based on their ads?Follow-up Q: And if another company comes in, what would make you switch provider?

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